Insurance for a child in the UK. What do you need to know about it?

Today’s article is aimed primarily at parents. If you have children, you know very well that illnesses and minor accidents do happen, often on a daily basis. In this post, however, we will focus on more serious situations that no one even wants to think about. If you’re wondering whether insurance for a child is worth the money spent on premiums and you’re not sure what the scope of such policies is, be sure to read this article to the end.

A Critical Illness policy can protect your child too

What is insurance for a child?

Insurance for a child is usually children’s critical illness cover added to a parent’s life or critical illness policy, rather than a separate product. The policy cannot protect your child from a serious illness, but it can help with the costs while your child is treated.

How does a critical illness policy work?

A critical illness policy obliges the insurer to pay a one-off benefit if, during the term of the policy, the insured person is diagnosed with one of the illnesses covered by the policy. Depending on the terms of the contract, payment will be made at the time of diagnosis, when surgery is required or when the illness is of a certain severity. As with other insurances, premiums are usually paid monthly.

Remember, however, that insurance for a child will not cover every illness that your youngster may face. When buying a policy, be sure to check the coverage so that your choice is an informed one. Of course, our staff will be happy to provide you with all the information and answer any questions you may have.

How can I buy insurance for my child?

Children’s critical illness cover is normally added to a parent’s life or critical illness policy rather than bought as a separate policy for the child. This means that you can bundle your children into your package. A claim under children’s cover pays a proportion of your own cover, up to a limit set by the insurer. With some insurers it does not reduce your own critical illness cover, so check your policy terms.

It is also worth thinking about insurance for a child if you do not yet have a family but are planning to start one or to enlarge it. There are two, very prosaic points to consider:

• How children’s cover works differs between insurers: some include it automatically and others let you add it to an existing policy, so check how your policy deals with children before you start or grow your family.

• Premiums for a new policy are usually higher the older you are when you take it out. For example, at 25 you would usually pay less for the same cover than at 35, assuming your health and other factors are the same. Buying insurance that includes your child may be more beneficial than buying the same policy some time down the line.

Where to take out a policy?

Let’s look at the issue from the more “logistical” side. Where do you buy insurance for a child (or simply for critical illnesses)?

• Directly from the insurer

• With a proven broker such as Extend Finance

We strongly recommend the second option. Why? Because by working with us, you have access to a wider range of insurance products. Extend Finance provides whole-of-market insurance advice. We compare insurance options from a broad range of UK insurers to help identify cover that suits your needs and circumstances. We discuss your circumstances and compare suitable available products, explaining the cover, exclusions and costs before you decide whether to proceed.

Why should you add children to your policy?

If your child is diagnosed with a covered illness, you will receive a lump sum that is normally free of income tax when you own the policy personally. Not only will this money help you get through the difficult time, but it will also help with medical treatment when private visits to specialists are needed.

Also consider that your child’s illness could affect your work. If your child becomes ill, you may not be able to work because someone will have to look after them and visit doctors. Financial security is particularly important for the self-employed.

How will a critical illness policy for children help you?

There are a number of expenses that will be associated with your child’s illness. For example:

• Costs of travelling to specialist clinics

• Accommodation costs for the person who will accompany your child during treatment

• Adaptation of your home for your child’s treatment and comfort (for example, if they are in a wheelchair)

• Childcare costs

• Compensation for the income you will lose due to the need to care for your sick child

• Purchase of medicines, rehabilitation equipment, rehabilitation costs

Which critical illnesses are covered by insurance for a child?

The coverage of insurance policies depends on many factors and it is impossible to say in advance that the occurrence of a particular illness will result in a benefit payment. It depends on the contract you sign with your provider. According to the Association of British Insurers, all critical illness policies cover cancer, heart attack and stroke. The other conditions covered, and how they apply to children, vary between insurers.

Check the full list of conditions in your policy documents before you buy.

We can help you explore children’s insurance options based on your child’s age, circumstances and the cover available from insurers. Your initial consultation with Extend Finance is free and without obligation. We’ll explain the options and insurance premiums before you decide whether to proceed.

Are you interested in the topic of insurance? Read also:

• Why do I need loss of income insurance?

• What do you need to know about PMI? (private medical insurance)

• How to choose an insurance broker? 8 things you need to know